Borrell survey finds frustrated local businesses
shifting money to their own sites, social media

Newspaper ad budgets being cut to spend on digital

Posted
Tuesday, October 18, 2016 9:01 pm

Barraged by advertising sales reps—calling an average of nearly 24 times a month—local businesses are shifting their marketing money away from traditional media and into their own websites and social media pages, a large new survey found.

Borrell Associates over the summer surveyed of 7,564 local businesses. What they found should give newspapers pause—if not alarm.

The report shows that nearly two-thirds are now buying ads or boosting postings on social media. The rate of participation in Facebook advertising has doubled since 2015, according to the report.

The Borrell survey of 7,564 local businesses shows that nearly two-thirds are now buying ads or boosting postings on social media.

Particularly striking was the rate of local businesses’ participation in Facebook advertising, which the report says has doubled since 2015. And 90% of those Facebook advertisers say they are satisfied with its effectiveness—with 36% claiming to be “very” or “extremely” satisfied.

Four of ten responding businesses said they plan to increase their digital budgets in the next year. Where is that going? Number one was social media websites—with businesses planning to spend 75% more than this year—followed by search engine advertising—up 44%—and, at third and up just 2%, newspaper websites.

“Probably the reason is that a newspaper website is a lot richer and deeper in content in local market than in a TV (website),” Borrell Associates CEO Gordon Borrell said in a webinar discussing the report. “Their audience is larger and stickier.”

But this relative popularity of newspaper websites comes at a price—a steep decline in overall spending on newspaper. Of all legacy media, newspapers took the biggest hit in planned spending, the survey found.

Fully 40% of local businesses say they plan to cut newspaper spending “a lot” to spend more on digital, and another 39% say they plan to cut it “a little.”

Clearly local businesses are being offered many choices—too many in the view of those surveyed. Borrell called it the “pester” factor from marketing reps. Businesses that only last year reported they were getting an average of 14.6 sales calls per month now say the number has shot up to 23.7.

Who’s being successful? “The (media organizations) who are going to win are the ones who have reps who have great marketing savvy, who knows the marketplace. The rep can’t just have digital savvy,” Borrell said.